[00:00:12] Speaker 01:
Her next case is 2017-1247, Hiles v. Shulkin.

[00:00:37] Speaker 02:
Ms.

[00:00:37] Speaker 02:
Helsby, please proceed.

[00:00:39] Speaker 02:
Thank you, Your Honor.

[00:00:41] Speaker 02:
And may it please the Court.

[00:00:42] Speaker 02:
Rachel Elsby for the Appellant Marshall Hiles.

[00:00:45] Speaker 02:
Mr. Hiles is a non-dependent surviving son of the veteran, Charles Hiles, in this case.

[00:00:51] Speaker 02:
Following the veteran's death, Mr. Hiles raised a claim at the VA for benefits based on a due process violation that occurred during the life of the veteran.

[00:01:01] Speaker 02:
Specifically, the VA violated the veteran's due process rights by failing to appoint Mr. Hiles as his fiduciary.

[00:01:09] Speaker 01:
The question presented here... Is he submitted an application to be the fiduciary?

[00:01:14] Speaker 01:
Does a veteran submit an application for Mr. Hiles to be the fiduciary?

[00:01:17] Speaker 02:
So there were a series of letters that were sent to the VA over the course of almost 12 months.

[00:01:22] Speaker 01:
Well, he asked them to recognize his power of attorney, which the regulations in the VA have declined to do.

[00:01:29] Speaker 01:
They don't recognize state power of attorney, and that's pretty clear under their rules.

[00:01:32] Speaker 01:
Did he submit an application or in fact it would actually be, did the veteran submit an application asking to have him appointed fiduciary duty?

[00:01:41] Speaker 02:
So the family certainly submitted several requests to be appointed the fiduciary.

[00:01:46] Speaker 02:
There's a letter that was sent March 10th by the veteran to the court or to the VA.

[00:01:52] Speaker 02:
seeking a change in veterans' benefits.

[00:01:54] Speaker 02:
We don't actually have a copy of that letter in the record.

[00:01:57] Speaker 02:
All we have is a letter from the VA recognizing the letter from the veteran that it received.

[00:02:02] Speaker 02:
It is our understanding, but again, it is not in the record that that included a request that his son be recognized as personal representative.

[00:02:10] Speaker 02:
There's no doubt that from February to September and then actually in the months that follow, Mr. Hiles, who was acting as the veteran's personal representative for all this healthcare

[00:02:21] Speaker 02:
and for his financial needs, sent multiple requests and also sent a letter documenting that his father was incompetent.

[00:02:29] Speaker 02:
They sent a diagnosis from the father's family doctor saying he's incompetent.

[00:02:34] Speaker 02:
He's got Alzheimer's.

[00:02:35] Speaker 02:
He's got dementia.

[00:02:36] Speaker 02:
He's been put in the hospital.

[00:02:38] Speaker 02:
It's hard to imagine a scenario under which they could have done more to get the government recognized.

[00:02:44] Speaker 01:
And then in September of 2006, the VA

[00:02:49] Speaker 01:
decided a number of things.

[00:02:51] Speaker 01:
Number one, they decided that he was entitled to an increased rating for his disability.

[00:02:55] Speaker 01:
But they also decided that evidence has been raised about Mr. Hiles, right?

[00:03:03] Speaker 01:
Mr. Hiles' competency.

[00:03:05] Speaker 01:
I keep getting the veteran and the son confused.

[00:03:08] Speaker 01:
Anyway, Mr. Hiles' competency.

[00:03:11] Speaker 01:
And at that point, said they were going to conduct some sort of inquiry into competency.

[00:03:19] Speaker 01:
Because, of course, I wouldn't want anybody appointing somebody my fiduciary and giving them power over my estate if I was not, in fact, incompetent, right?

[00:03:27] Speaker 01:
You wouldn't want to see that happening.

[00:03:28] Speaker 01:
So they said at that point, they're going to conduct a competency evaluation.

[00:03:33] Speaker 01:
They conducted it.

[00:03:34] Speaker 01:
We all wish it would have gone in a more timely fashion.

[00:03:36] Speaker 01:
That is certainly true.

[00:03:38] Speaker 01:
From September of 2006 until January 2007, I'm dying to know exactly what they did during that time, what constitutes such a competency evaluation.

[00:03:48] Speaker 01:
Hopefully, the government will tell me, do you have any idea what they did during that time?

[00:03:52] Speaker 02:
I would say they did nothing.

[00:03:53] Speaker 01:
I know.

[00:03:54] Speaker 01:
I anticipated that would be your response.

[00:03:56] Speaker 01:
I'm hoping that they say they did something other than nothing.

[00:03:59] Speaker 02:
But actually, they didn't conduct an incompetency investigation from September to January.

[00:04:04] Speaker 02:
Actually, they said in their September, the Tiger Team September decision, there is a definitive finding of incompetency.

[00:04:10] Speaker 02:
So they actually found it there.

[00:04:12] Speaker 02:
I thought they said there was a proposed finding of incompetency.

[00:04:14] Speaker 02:
based on a definitive diagnosis from the family doctor.

[00:04:17] Speaker 02:
I think this is that Appendix 2199.

[00:04:21] Speaker 02:
So the language was actually, they proposed a determination of incompetency, but the fact-finding was actually basically complete.

[00:04:33] Speaker 02:
And it's, so 2208, the VA examiner and the Veterans Private...

[00:04:44] Speaker 03:
Okay, 2208, which paragraph are you looking at?

[00:04:48] Speaker 02:
It starts section 9, a finding of incompetency is proposed.

[00:04:53] Speaker 02:
And then it says in the second paragraph, the sentence beginning where, sorry, the sentence beginning since.

[00:05:00] Speaker 02:
Since there is a definitive finding of incompetency by a physician in this case.

[00:05:05] Speaker 02:
So basically they had all the facts in front of them.

[00:05:08] Speaker 02:
by September of 2006, and then just did nothing in the time that followed.

[00:05:13] Speaker 02:
And the veteran's family on October 1st immediately sends a letter challenging certain aspects of the Tiger Team's decision.

[00:05:20] Speaker 02:
One aspect they did not challenge was the finding of incompetency.

[00:05:23] Speaker 02:
And the government has come back and said, well, we had to let a 60-day time period run because the regs require us to give the veteran time to challenge a proposal of incompetency.

[00:05:37] Speaker 02:
At the very least, there was an implicit waiver of that 60-day time period giving everything that had been provided to the VA, including the veteran providing medical records from the doctor that says, he's incompetent.

[00:05:50] Speaker 02:
There was no way in which the veteran would have challenged it.

[00:05:53] Speaker 02:
They should have just moved forward and appointed the fiduciary.

[00:05:55] Speaker 01:
So if they let the 60 days roll, then it would have been November of 2006 when a fiduciary should have been appointed, right?

[00:06:04] Speaker 01:
That's right.

[00:06:04] Speaker 01:
And then that fiduciary would have been eligible to accept receipt of the increased benefits at a minimum that had been awarded as of September 2006.

[00:06:13] Speaker 02:
That's right.

[00:06:15] Speaker 01:
And so what did happen though?

[00:06:19] Speaker 01:
They didn't do anything in your view until January 2007?

[00:06:23] Speaker 01:
And then what did they do in January?

[00:06:25] Speaker 02:
In January of 2007, they sent a letter to the veteran, the veteran's family saying,

[00:06:31] Speaker 02:
OK, we have decided you are incompetent, and now we need to go through our fiduciary.

[00:06:37] Speaker 02:
Where is that letter in this?

[00:06:51] Speaker 02:
I think it's 2101.

[00:06:52] Speaker 02:
Yeah, 2102 is where they address the competency issue.

[00:06:57] Speaker 02:
And they basically just repeat the same thing that the Tiger team's decision said.

[00:07:08] Speaker 02:
So now they would have to go through the process of officially appointing the fiduciary.

[00:07:12] Speaker 02:
And granted, they have their own process.

[00:07:13] Speaker 02:
They don't immediately recognize the power of attorney.

[00:07:16] Speaker 02:
But it's clear that that is the standard sort of paperwork that they would have accepted, ultimately, and recognized Mr. Hiles as his father's fiduciary.

[00:07:33] Speaker 01:
So they come along in January and say, OK, now we've recognized you as incompetent.

[00:07:38] Speaker 01:
Where do they say, in this letter, do they say they're going to now have a fiduciary appointed or what?

[00:07:45] Speaker 01:
I don't see anything about a fiduciary.

[00:07:47] Speaker 01:
Am I missing part of the letter or am I missing the statement about a fiduciary somewhere?

[00:07:55] Speaker 02:
I'm not actually sure.

[00:08:01] Speaker 02:
I'd have to find to see if there's a separate site to that, but that would be, and that's

[00:08:06] Speaker 02:
the statements that have been made that the next step in the process, once you have a finding of incompetency, is to appoint the fiduciary.

[00:08:12] Speaker 02:
I can find you whether there's an exact citation to that.

[00:08:19] Speaker 02:
I believe it comes a little bit further.

[00:08:22] Speaker 01:
So if Mr. Hiles had been appointed fiduciary, then he could have received those benefits from September 2006.

[00:08:34] Speaker 01:
But what other money is there really at stake?

[00:08:37] Speaker 01:
I mean, there was something that looked, I will be honest with you, kind of outrageous that suggested Mr. Hiles thought he was entitled to $600,000 somehow.

[00:08:47] Speaker 01:
I don't know what for, precisely.

[00:08:49] Speaker 01:
But what else would the veteran have been entitled to?

[00:08:53] Speaker 01:
Because Mr. Hiles Jr., the son, is not technically entitled to anything in terms of accrued benefits once his dad has passed away.

[00:09:04] Speaker 01:
So only the fiduciary can receive on behalf of the veteran, because that's what this money is for, on behalf of the veteran or dependent children, which we don't contest your son does not qualify as, correct?

[00:09:14] Speaker 01:
That's correct.

[00:09:15] Speaker 01:
So what really is at stake in this case?

[00:09:18] Speaker 02:
So it would look a lot like what an accrued benefits award would be.

[00:09:23] Speaker 02:
It would be the money that was awarded through the Tiger Team's September decision, which was made retroactive to February.

[00:09:28] Speaker 02:
So it's not a large sum of money, but it's the sum of money

[00:09:31] Speaker 02:
It's an issue that's important, and it's money that the veteran would have been entitled to had his due process rights not been violated.

[00:09:38] Speaker 03:
So I gather that what we're going to hear, do you know what that amount is?

[00:09:43] Speaker 02:
It's on the order.

[00:09:44] Speaker 02:
I don't have the exact number, but I think it's on the order of $5,000 to $6,000.

[00:09:47] Speaker 02:
OK.

[00:09:48] Speaker 03:
I think I understand from the answers that you gave earlier that the position that you think what the government's going to say, or you understand the government's position to be, that the reason why there was such a delay

[00:10:02] Speaker 03:
was just in the event that the evidence of incompetency would have been contested by the veteran himself to give the veteran time to say, no, my child's trying to take my money away from me, and it's my money, and I am competent.

[00:10:19] Speaker 03:
Is that what the notice function is about and what the timing is about?

[00:10:22] Speaker 03:
Now, I understand you're saying that there was no such paper filed in this case, but is that the reason why there's a delay in time?

[00:10:31] Speaker 02:
Right, and I think it actually uses the word due process in the reg.

[00:10:34] Speaker 02:
There's a 60-day window established for somebody where an incompetency finding has been proposed so they can challenge it in the event that they're not incompetent.

[00:10:43] Speaker 02:
Here, there was really no question about whether incompetency was an issue.

[00:10:48] Speaker 02:
But the government has really boiled it down to these two 60-day windows from September to January.

[00:10:54] Speaker 02:
But the case is really February 2006 to January 2007.

[00:10:57] Speaker 02:
February 2006.

[00:10:59] Speaker 02:
is when the family starts making claims to the VA, saying, my father has these health problems.

[00:11:04] Speaker 02:
It's time critical, by the way.

[00:11:06] Speaker 02:
That's why a Tiger team was appointed, because they're there for expedited review when you know a veteran is near end of life.

[00:11:12] Speaker 02:
The veteran submitted his own letter in March of 2006.

[00:11:15] Speaker 02:
This went on.

[00:11:17] Speaker 02:
The family continued to repeatedly send letters over the summer preceding the Tiger team's decision.

[00:11:23] Speaker 02:
So I think at any point during that period,

[00:11:26] Speaker 02:
the VA very easily could have initiated incompetency findings.

[00:11:30] Speaker 02:
Instead, it let it go until the Tiger team reached its final decision.

[00:11:33] Speaker 01:
But did the February information that was submitted originally with that claim include allegations of the veterans' incompetency?

[00:11:42] Speaker 01:
I thought that kind of arose a little later in the process as the disease progressed.

[00:11:51] Speaker 02:
Mr. Hyles sent a letter February 9th of 2006.

[00:11:55] Speaker 02:
Mr. Hyles Jr.

[00:12:00] Speaker 02:
sent a letter to the VA.

[00:12:03] Speaker 01:
You're not technically a junior, so we probably ought not to call him that.

[00:12:06] Speaker 01:
We have different first names.

[00:12:09] Speaker 02:
And with that, he sent the power of attorney and said, look, I'm managing my father's affairs now.

[00:12:14] Speaker 02:
He can't manage them.

[00:12:16] Speaker 02:
So that was the first notice.

[00:12:18] Speaker 02:
But even if that wasn't enough, the veteran sent a letter in March 10, and then the family doctor sent his diagnosis by July of 2006.

[00:12:26] Speaker 02:
So now we have a definitive diagnosis.

[00:12:29] Speaker 02:
At that point in time, he was put in the hospital for dementia and Alzheimer's.

[00:12:32] Speaker 02:
That's recognized in the veteran's court's decision.

[00:12:35] Speaker 02:
So we know there's incompetency issues well before September of 2006.

[00:12:38] Speaker 01:
And so what precisely is your due process argument?

[00:12:43] Speaker 01:
See, I want you to, does it include

[00:12:46] Speaker 01:
his due process rights, the veterans due process rights, were violated by virtue of a fiduciary not being appointed at an earlier time?

[00:12:55] Speaker 01:
Or what is the precise nature of your due process argument?

[00:12:59] Speaker 02:
Right.

[00:12:59] Speaker 02:
The due process argument is a violation of the veterans due process rights.

[00:13:04] Speaker 02:
And it's going from the time period of February 2006 until it would effectively terminate January 2007 because they never completed the process of appointing a fiduciary.

[00:13:16] Speaker 02:
And it is the VA's failure to expedite and move quickly in that process and to essentially have delays throughout to not recognize the correspondence that was sent over the summer, to not move once it had the Tiger team's decision.

[00:13:27] Speaker 02:
And then after, even if it had to let that 60-day window expire, it still did absolutely nothing until at least January 17th.

[00:13:36] Speaker 01:
Let's save your rebuttal time and let's hear from Mr. Yell.

[00:13:51] Speaker 00:
Can it please the court?

[00:13:53] Speaker 00:
We'd first like to address the 60 days that we were talking about before.

[00:13:58] Speaker 00:
So September 26, there's a determination of a proposed incompetency.

[00:14:05] Speaker 00:
Under the regulations, there's a 60-day notice period.

[00:14:08] Speaker 00:
And that's really for protection of the veteran.

[00:14:12] Speaker 01:
But what do we do with that sentence that says, since there is a definitive finding of incompetency by a physician in this case,

[00:14:19] Speaker 01:
and the claimant is not shown to be able to manage personal affairs to include disbursement of funds, we propose to make a determination of incompetency for VA purposes.

[00:14:29] Speaker 00:
Sure, but that doesn't rule out that the veteran could come back and say that the doctor may be saying one thing, but for example... Was that when the 60-day window starts, when that?

[00:14:40] Speaker 00:
The 60-day window starts from the date of the proposed incompetency, which was the September 26th.

[00:14:46] Speaker 00:
So there's 60 days now

[00:14:48] Speaker 01:
And where does this 60 days?

[00:14:50] Speaker 01:
Is there a regulation or rule that lays the 60 days out?

[00:14:53] Speaker 01:
Just tell me the number of it so I know.

[00:14:55] Speaker 00:
I think it's 38 CFR 3.53.

[00:14:58] Speaker 00:
I think it's 353 E. Yeah, 38 CFR 3.53 E. Due process, it's labeled.

[00:15:19] Speaker 01:
Okay, so there's a 60-day window after this, and that would have put us to when?

[00:15:25] Speaker 00:
That would put you to November 26, or around that time, 2006.

[00:15:31] Speaker 00:
So then January 17th was the final determination of incompetency.

[00:15:39] Speaker 00:
So you have a little less than two months.

[00:15:44] Speaker 01:
I think it's January 8th, right?

[00:15:46] Speaker 01:
Isn't it, at 2101, isn't it January 8th?

[00:15:49] Speaker 00:
January 8th, I think, was the rating decision, but I believe that the actual determination was on the 17th.

[00:16:03] Speaker 01:
Oh, is the document on 2102 not a continuation of the document on 2101?

[00:16:09] Speaker 00:
It is.

[00:16:10] Speaker 00:
It's a combined document.

[00:16:12] Speaker 01:
Well, that document is dated January 8th.

[00:16:15] Speaker 00:
Correct.

[00:16:16] Speaker 00:
But I believe that's, if you look at 2099, that is when it was issued and that's dated January 17.

[00:16:28] Speaker 00:
So it's including the rating decision.

[00:16:34] Speaker 00:
It says we have enclosed a copy of our rating decision for your review.

[00:16:38] Speaker 00:
So this is when the veteran is being notified.

[00:16:42] Speaker 00:
I see.

[00:16:43] Speaker 01:
So why?

[00:16:44] Speaker 01:
Why from November 26 through January 8 when you've got a proposed incompetency, nobody disputes it, you know, because the 60 days have passed, it was actually proposed in September, the 60 days have passed, I mean heck, the veteran himself was submitting numerous pieces of paperwork to the VA saying please let my son take care of my affairs, you know, I'm sick and stuff.

[00:17:06] Speaker 01:
Why then

[00:17:08] Speaker 01:
didn't the agency do anything from November 26 until January 17?

[00:17:13] Speaker 00:
Well, I can't really explain that, Your Honor.

[00:17:16] Speaker 00:
There's nothing in the record that would explain what exactly is going on there.

[00:17:21] Speaker 00:
One possible explanation is that the 60 days runs

[00:17:25] Speaker 00:
I mean, if somebody would come back 10 days after the 60-day period, I mean, that would be information that would be considered.

[00:17:34] Speaker 01:
So the 60-day period is not 60 days, it's 70 days because people might not comply with the 60 days, so you wait longer?

[00:17:39] Speaker 00:
Well, that's not what I'm saying.

[00:17:42] Speaker 01:
What I'm saying is that... That is exactly like what you were saying.

[00:17:44] Speaker 00:
Well, there's a 60-day period, but the regulation, I don't believe, says on the 61st day they have to

[00:17:53] Speaker 00:
issue what the document they were just looking for.

[00:17:57] Speaker 00:
We can't explain it, but we can't explain that delay of approximately six weeks, we call it.

[00:18:07] Speaker 01:
They're saying that that in part amounts to a due process violation of the veteran because he was not able to receive the disbursement of the funds.

[00:18:15] Speaker 01:
Forget about the $600,000.

[00:18:16] Speaker 01:
I don't even understand that claim.

[00:18:18] Speaker 01:
But at least you all adjudicated him as of September

[00:18:22] Speaker 01:
2006 to be entitled to an increased rating.

[00:18:26] Speaker 01:
And that rating was retroactive to February.

[00:18:28] Speaker 01:
But you weren't giving him the money.

[00:18:31] Speaker 00:
That's correct, Your Honor.

[00:18:32] Speaker 01:
Why weren't you giving him the money?

[00:18:34] Speaker 01:
You adjudicated him entitled to it.

[00:18:36] Speaker 01:
Why wasn't he getting it?

[00:18:37] Speaker 00:
Well, the explanation was that they hadn't gone through the fiduciary appointment process.

[00:18:42] Speaker 00:
And then once the final confidence... What does that mean?

[00:18:45] Speaker 01:
Wait, wait.

[00:18:45] Speaker 01:
Hold on.

[00:18:46] Speaker 01:
Explain to me.

[00:18:46] Speaker 01:
Why do they have to go, I don't understand.

[00:18:48] Speaker 01:
He has not been adjudicated incompetent, right?

[00:18:51] Speaker 01:
You're telling me that he had not been adjudicated incompetent.

[00:18:56] Speaker 01:
But there's an allegation of proposed incompetence.

[00:19:00] Speaker 01:
So if I'm a veteran, right, and I'm living on these meager, I'm subsiding on these meager disability benefits, I'm a disabled veteran.

[00:19:09] Speaker 01:
Someone has alleged that I'm incompetent.

[00:19:11] Speaker 01:
I can't get my benefits that you've adjudicated me necessary for life.

[00:19:17] Speaker 01:
You found that he needs these benefits to survive.

[00:19:20] Speaker 01:
Someone has alleged I'm incompetent, but I can't collect my benefits because the incompetency hasn't been adjudicated.

[00:19:27] Speaker 01:
I don't understand.

[00:19:29] Speaker 00:
Well, Your Honor, I mean, one, I mean, that's part of the statutory scheme.

[00:19:33] Speaker 00:
And we think that young men specifically covers the situation.

[00:19:36] Speaker 00:
They're a part of the statutory scheme.

[00:19:38] Speaker 03:
Where does the statutory scheme say that you withhold it until he's adjudicated incompetent?

[00:19:43] Speaker 00:
Well, what I was referring to was our standing argument in terms of

[00:19:47] Speaker 01:
I'm not interested in your standing argument right now.

[00:19:50] Speaker 01:
I want to know why he wasn't getting his benefits.

[00:19:53] Speaker 00:
Well, the explanation from the VA and from the board was that a final determination of incompetency had not been issued, and so they told... So wait, they're tolling.

[00:20:06] Speaker 01:
They're not giving him his benefits.

[00:20:07] Speaker 01:
I assume this is some sort of paternalistic explanation, right?

[00:20:12] Speaker 01:
He's been proposed incompetent, so we don't want to give him money.

[00:20:14] Speaker 01:
We don't want to hand the money over to someone

[00:20:16] Speaker 01:
who's incompetent, because then if he does something bad with the money, we should have known, right?

[00:20:22] Speaker 00:
Sure.

[00:20:22] Speaker 01:
That's the logic behind it.

[00:20:24] Speaker 00:
The regulations are for the protection of the veteran.

[00:20:27] Speaker 01:
But here's my favorite part.

[00:20:29] Speaker 01:
You are continuing to give him the original benefits during this time.

[00:20:31] Speaker 01:
So wait.

[00:20:32] Speaker 01:
We've got a proposal of incompetency.

[00:20:34] Speaker 01:
The guy had been getting a 10% disability rating.

[00:20:37] Speaker 01:
You're sending him that money.

[00:20:40] Speaker 01:
You've now adjudicated him entitled to a higher disability rating.

[00:20:43] Speaker 01:
So the only thing you're withholding from him is the difference.

[00:20:46] Speaker 01:
between the 10% he was originally getting and the higher amount that you've adjudicated he's entitled to and necessary for his survival.

[00:20:54] Speaker 01:
How do you explain that?

[00:20:55] Speaker 01:
How can any logic justify he's potentially incompetent so we can't give him money, so we'll just give him half the money but not all the money?

[00:21:03] Speaker 01:
How can any degree of logic justify that?

[00:21:06] Speaker 00:
Well, it is certainly difficult to explain, Your Honor.

[00:21:09] Speaker 00:
I mean, I would say I think at that point in time they were focusing on the change, that difference as

[00:21:16] Speaker 00:
in terms of the new money that would be coming in.

[00:21:20] Speaker 00:
Potentially, I guess the VHA should have probably withheld all funds to the better.

[00:21:27] Speaker 01:
So none of the money necessary to allow him to survive, pay his bills, get food, it all should have stopped at the minute there was a proposal of incompetency?

[00:21:36] Speaker 00:
Well, that would be the natural sort of

[00:21:41] Speaker 00:
implication of that.

[00:21:42] Speaker 00:
But again, that didn't happen.

[00:21:44] Speaker 01:
Just a tiny bit faster on this fiduciary thing, given all of that.

[00:21:47] Speaker 01:
So you're saying what they should have done is not given him any money.

[00:21:49] Speaker 01:
They in fact gave him some money.

[00:21:52] Speaker 01:
Wouldn't that suggest then there's a real problem with not appointing a fiduciary from September until January?

[00:21:59] Speaker 01:
Because under your logic, he shouldn't have gotten any of his money.

[00:22:01] Speaker 01:
That's the logical.

[00:22:03] Speaker 01:
So you've got a disabled veteran who can't survive absent this money, which is what the rating decision decided.

[00:22:10] Speaker 01:
And your suggestion is it was okay for the VA to give him no money from September till January.

[00:22:16] Speaker 01:
How's the guy going to eat?

[00:22:17] Speaker 01:
What I mean, cat food?

[00:22:19] Speaker 00:
Well, Your Honor, that didn't happen in this case.

[00:22:21] Speaker 00:
No, you're right.

[00:22:22] Speaker 01:
You gave him half the money, but not the rest of the money.

[00:22:25] Speaker 00:
Correct.

[00:22:26] Speaker 01:
Because he's potentially incompetent.

[00:22:29] Speaker 00:
Well, because the VA received information that he was potentially not able to manage his affairs.

[00:22:37] Speaker 00:
These regulations are for the protection of the veterans.

[00:22:40] Speaker 03:
What regulation, I just didn't hear an answer to my earlier question, is what is the regulation or statutory provision that allows the VA to withhold money in the circumstance where there's been some proposal that the veteran's incompetent?

[00:22:58] Speaker 00:
Well, I believe it was, the regulation at issue was 38 CFR 3.

[00:23:09] Speaker 00:
353.

[00:23:25] Speaker 03:
Where does it say that they can withhold any of the funds that are due until the time that there is a decision on incompetency?

[00:23:40] Speaker 00:
I'm not sure if it's in B2 where it says, where the beneficiary is rated incompetent, the veteran service center manager will develop information under that section.

[00:24:08] Speaker 00:
I don't see any other language within that regulation.

[00:24:11] Speaker 01:
So this would say, when the veteran is rated incompetent, just out of curiosity, did that happen according to you?

[00:24:16] Speaker 01:
Did it happen in the September thing that proposed his incompetency, or did it happen in the rating decision that, according to you, determined his incompetency?

[00:24:30] Speaker 00:
I believe it would have to be the final rating.

[00:24:34] Speaker 00:
Yeah, I know, right?

[00:24:35] Speaker 01:
So then how did they withhold from September until

[00:24:39] Speaker 01:
January.

[00:24:41] Speaker 01:
This reg wouldn't support them doing that, right?

[00:24:43] Speaker 01:
Even if this reg supported them doing it once they finally determined him incompetent, it doesn't support them doing it before then.

[00:24:49] Speaker 01:
Do you believe this is part of his due process challenge?

[00:24:54] Speaker 00:
Well, as to the due process challenge, in order to demonstrate a due process violation, you have to have a property interest.

[00:25:04] Speaker 00:
And as far as Mr. Hyles, the son, goes,

[00:25:08] Speaker 00:
We think that the statutory framework for an adult child is clear that he cannot recover.

[00:25:15] Speaker 00:
And we think that Youngman and the Richards v. West case that Youngman cited to, which goes through due process, is clear on that, that when a veteran dies, his entitlement to the benefits is extinguished.

[00:25:33] Speaker 00:
Now, there are certain

[00:25:35] Speaker 00:
individuals, certain specified individuals who can receive those monies.

[00:25:40] Speaker 01:
He's already acknowledged he's not one of those.

[00:25:43] Speaker 00:
Correct.

[00:25:46] Speaker 00:
But as to the veteran, at the death of the veteran, there's no entitlement to the benefits.

[00:25:56] Speaker 00:
And due process only extends as far as the statutory entitlement.

[00:26:01] Speaker 01:
Now you say that, but that's the part I'm not certain about.

[00:26:04] Speaker 01:
I believe you're absolutely right on accrued benefits in general, but I didn't find any cases suggesting that due process claims likewise go up in smoke at the time of a veteran's death.

[00:26:16] Speaker 01:
Are you familiar with any that do that?

[00:26:19] Speaker 01:
The due process is really unique, right?

[00:26:22] Speaker 01:
The due process, hey, I get to look at that question.

[00:26:24] Speaker 01:
I don't have to do that for anything else.

[00:26:27] Speaker 01:
The due process has a lot of unique attributes here at the Federal Circuit, so what

[00:26:31] Speaker 01:
Are you sure that those due process claims likewise evaporated a veteran's death, that there's a due process, especially over his end of life benefits and everything?

[00:26:40] Speaker 00:
Sure.

[00:26:40] Speaker 00:
Well, that was an argument on reply that Mr. Hyles pointed out.

[00:26:46] Speaker 00:
One of the cases that we relied upon young men, young men's sites to Richards v. West, and I'll give you the site on that, 161F3D719,

[00:26:58] Speaker 00:
In that case, it goes through at 723, it discusses the fact that there was a due process claim there, and that was the brother, the heir who was a brother trying to get it.

[00:27:16] Speaker 00:
And the court stated that because a veteran's claim to disability compensation under Chapter 11 of Title 38 is terminated by his or her death,

[00:27:29] Speaker 00:
a veteran and therefore a veteran's estate cannot have a protected property interest arising from existing rules or understandings in such compensation.

[00:27:38] Speaker 00:
So we feel that the Youngman case, which was the primary case we relied upon, cited and mentioned that case, relied upon it heavily.

[00:27:49] Speaker 00:
And so we do think that there is no protected property interest in this case.

[00:27:55] Speaker 01:
So is this true?

[00:27:56] Speaker 01:
I mean, I know what the statute says about accrued benefits.

[00:28:00] Speaker 01:
Suppose in this case the facts were that you ruled him incompetent in September of 2001 and then failed to appoint a fiduciary until 2006.

[00:28:15] Speaker 01:
You know, something really outrageous, an outrageous set of facts.

[00:28:20] Speaker 01:
And during that time, he was entitled to benefits when you were withholding them under 353B, as we discussed.

[00:28:29] Speaker 01:
And you failed to appoint this fiduciary, and then he died.

[00:28:33] Speaker 01:
What happens?

[00:28:35] Speaker 01:
Really, nobody gets those benefits?

[00:28:38] Speaker 00:
You're talking about a five-year period.

[00:28:40] Speaker 00:
Within that five-year period, presumably there would be challenges that these benefits had been awarded.

[00:28:46] Speaker 00:
There could be a writ of mandamus that they've been awarded and not paid.

[00:28:50] Speaker 00:
This was not a five-year period.

[00:28:54] Speaker 00:
We were looking prior at the length of time here.

[00:28:58] Speaker 00:
I mean, in general, delays in these VA cases are not often determined to be due process violations in and of themselves.

[00:29:08] Speaker 00:
Um, and it's often a year's period here.

[00:29:10] Speaker 00:
We're talking about a matter of six weeks now.

[00:29:13] Speaker 01:
Do you, do you agree that if he denied fiduciary status, Mr. Marshall, how the son had been denied status as his father's fiduciary, that that would be something that he could appeal and the court below would have jurisdiction over.

[00:29:29] Speaker 01:
Well, he at the time survived the veterans death, I guess is the question.

[00:29:35] Speaker 00:
Well,

[00:29:36] Speaker 00:
I don't think it actually survives the veteran's death because he would not be able to recover.

[00:29:43] Speaker 00:
We're still under a situation where there's no standing because he's still not able to recover any money.

[00:29:49] Speaker 01:
So not even a fiduciary can recover money after the veteran died that was owed to the veteran?

[00:29:55] Speaker 00:
Well, that's the Youngman case.

[00:29:56] Speaker 00:
The Youngman case, there is actually a fiduciary appointed and they are trying to recover the money in that situation.

[00:30:02] Speaker 00:
So we're even one step removed from that case.

[00:30:06] Speaker 00:
So I'm not sure how it would be essentially a standalone due process claim in the absence of any sort of veteran disability benefit compensation.

[00:30:17] Speaker 00:
And we certainly don't think that Mr. Howes has put forth any precedent for such a claim.

[00:30:27] Speaker 00:
And it really is in terms of standing, it's the claimant's burden to

[00:30:34] Speaker 00:
put forth some basis for standing that there's some sort of injury in terms of veterans benefits that have been suffered by Mr. Hiles.

[00:30:45] Speaker 01:
You can see my frustration over how this veteran and his family were handled by the VA, but I'm very much afraid that

[00:31:03] Speaker 01:
He's right on the legal issue, and that despite really poor behavior by the VA, that the son is not entitled to inherit accrued benefits under the statute.

[00:31:14] Speaker 01:
So he has no standing, whether he was the fiduciary or not.

[00:31:19] Speaker 01:
So how do you get over that?

[00:31:21] Speaker 01:
Because I feel like, despite my government not having treated this veteran and his family very well, nonetheless, he has a technical legal argument, and I am, as a judge, bound to follow the law.

[00:31:33] Speaker 01:
So tell me, how is it that there is standing in this case for anyone to receive these benefits?

[00:31:41] Speaker 02:
So first I would say that we don't think it's barred by 5121 because the due process claim stands independent of a claim for accrued benefits under 5121.

[00:31:50] Speaker 02:
We admit we think it is an open question whether the estate can step into the shoes of the veteran.

[00:31:55] Speaker 02:
We've not found a case particularly or that directly addresses this issue.

[00:32:00] Speaker 02:
The government brings up the Richards case.

[00:32:02] Speaker 02:
The Richards case is different because the Richards case, the heir there was trying to step into the shoes of the veteran to pursue a disability claim that had never been awarded.

[00:32:11] Speaker 02:
Here you actually have an award.

[00:32:12] Speaker 02:
This court said in Cushman that veterans have due process right.

[00:32:17] Speaker 02:
It's a property right that they have and their benefits and it's vested.

[00:32:21] Speaker 02:
And so the open question in our mind, which we think is potentially an issue of first impression, is whether the heir

[00:32:28] Speaker 02:
in that situation, when it's been awarded and not paid, can then step into the shoes where you have a due process violation.

[00:32:33] Speaker 01:
We think there's a good reason for it because... And you recognize that that would be distinct from all your other claims.

[00:32:40] Speaker 01:
For example, I understand that Mr. Hiles, the appellant, wanted to challenge the September decision because he thought, and his dad thought that he should be entitled to a higher rating than he had actually been given.

[00:32:54] Speaker 01:
due process would cover none of that, right?

[00:32:56] Speaker 02:
We understand that.

[00:32:57] Speaker 02:
We haven't raised that on appeal.

[00:32:59] Speaker 02:
The appellant was pro se below, and I know he raised a number of arguments.

[00:33:04] Speaker 02:
We've only addressed this issue on appeal.

[00:33:06] Speaker 02:
We've narrowed it to the singular issue of the due process claim relative to that September decision, the benefits awarded through that decision.

[00:33:14] Speaker 02:
So we'll be limited in that way.

[00:33:19] Speaker 01:
Okay, thank you, Ms.

[00:33:20] Speaker 01:
Elsby.

[00:33:21] Speaker 01:
The case is taken under submission.

[00:33:22] Speaker 01:
I thank both of their counsel for their excellent arguments today.